Europe will remain open to everyone but will no longer be naive in the face of the rapidly changing world and will seek to be in the driving seat, Commissioner Thierry Breton told EURACTIV and a group of media ahead of the presentation of the update of the EU’s industrial strategy on Wednesday (5 May).
The Commissioner for Internal Market also said the EU also needs to be more self-sufficient in critical areas and react quickly when production is needed, as has recently been the case with the vaccines.
What does the update of the industrial strategy bring?
I have heard a lot of things: fears of protectionism, the return of planned economy, or fuelling trade tensions. Our vision of the world is being challenged, because the world is changing drastically. We were asked by the European Council to anticipate these changes and draw lessons. The question is if we want to be leaders or we want to be followers or bystanders. I want to put Europe back in the driving seat.
All my life I made partnerships as CEO of many companies. But partnerships mean a balance of power. We need to be strong, otherwise, we cannot build partnerships. We are in a period when there is a lot of state aids, more than ever. From my previous life, I know that the weight of the state has to be used just for what it is and no more. I will be extremely cautious on this as you could imagine.
What includes the package?
We are presenting an update of the industrial strategy and also regulation on foreign subsidies. For the strategy, we made an in-depth overview of the impact of the Covid on all the [industrial] ecosystems to see what tools we should use to support ecosystems. So we have a good overview. The impact of the pandemic, of course, has not been the same. Tourism and culture industries were hit the most, with turnover fall of up to 75%. It is an ecosystem that requires a lot of attention.
You are paying special attention to how to deal with our dependencies.
We learnt from the experience in the vaccine task force. We need to produce some critical parts in Europe because we cannot depend for those elements on others. We look at all the products that we import, a total of 5,000 products of all kinds, like magnets or active ingredients. We have 137 highly dependent products in the most sensitive ecosystems, but not all strategic. Among them, we identified 34 with the lowest diversification potential, where we are extremely dependent on one or two countries. We made six in-depth reviews in hydrogen, raw materials, batteries, semiconductors, an extremely important subject, cloud and data and active pharmaceutical ingredients.
How should we address these dependencies? Should we be bringing back production?
We are proposing to diversify, recycling and alternative innovation proposal for each of these materials. We need to be pragmatic. One year ago, I wouldn’t be able to tell you that, by the end of that year, Europe would be the first world producer of vaccines. In one way or another, we can say that we brought that line of production. And we need to be able to be more self-sufficient, for many reasons, including the ability to react quickly.
How would you diversify our supply chain?
I don’t want to give the impression that we will make everything on our own. This is absolutely the opposite. We have a lot of dependencies because of our supply chains. As we saw in this crisis, in some areas, we saw it is important to have some balance of power. To tell you the truth, this is new for Europe. This crisis taught us this new dimension of what it means to be an open continent with neighbours that would not have the same rules that we do. In the US everything is closed now. Decisions taken by the Biden Administration are only helping US companies. I understand. I don’t want to speak about China, but the same story. We have to find our way to continue to be open, but also to have a balance of power. I can tell you that I have been in the position to discuss and negotiate with the US, China and India where it is important to have tools, even if you don’t use them.
For the vaccine export authorisation mechanism, we said that we would export only to places with reciprocity, We never used it. But the fact that it exited meant a lot to make sure that supplies went to our factories when it was needed. Believe me. Before the tool, I was concerned that a lot of our factories were calling to say that they did not have the supplies. Not being naive means putting ourselves in a position where we are able to continue to be open but under our conditions. For me, it is extremely important to use the word “open”, but now we are in our driving seat.
Did you discuss the strategy with companies?
I tried to be as inclusive as possible, with CEOs, authorities, unions, also some important US partners, to see if they felt comfortable with our strategy. We are open, but it is true that we are more demanding now from our partners. It is important for them to know what are our rules. I think Europe was too naive before, it had no clear rules. We just said we were open. We continue to be open, but now we have our vision, and we welcome our partners to help us with our vision.
What instruments do you propose to support tourism, given that it is the hardest hit ecosystem?
We made an in-depth analysis and we will enhance this analysis by discussing it with the ecosystem itself. We are focusing mainly on everything we can do for the reopening of the summer season. In addition, we also have some green targets for 2030 for tourism.
What would you do to save this season?
I am pushing for making sure, as much as I can, that all member states will be able to vaccinate at least 70% of the adult population by mid-July. In addition, we are working extremely hard to put forward the vaccine certificate with member states. We are also interacting a lot with tourism operators. We will have funding for SMEs. In sum, many initiatives but we are not finished with the tourism yet.
[Edited by Zoran Radosavljevic]